Analyst: AMC's TV triumph is getting torn apart by services like Netflix

Advertisement

Don Draper, Mad Men

AMC

Netflix giveth and Netflix taketh away.

Advertisement

That's the thrust of a recent Pacific Crest analyst note, in which Andy Hargreaves and Evan Wingren wrote that cable TV network AMC's prospects are looking dire.

AMC is a network that has built its recent success out of high-quality dramas like "Breaking Bad," "Mad Men," and "The Walking Dead." AMC execs have also credited Netflix viewers for helping launch "Breaking Bad" as a cultural phenomenon. "I think Netflix kept us on the air," "Breaking Bad" creator Vince Gilligan once said.

Complimentary Tech Event
Transform talent with learning that works
Capability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More

But now the rise of streaming services like Netflix might be tearing AMC down.

"Average audiences for almost every returning AMC original in 2016 are down double-digits versus 2015," the Pacific Crest analysts wrote. "This highlights the increase in competition for viewer time. In particular, the explosion in high-quality original dramas driven by [streaming video on demand] companies [like Netflix] has commoditized an area of programming that AMC helped popularize and represents the core of the network's brand."

Advertisement

Here is a chart of the performance of AMC's returning shows:

Screen Shot 2016 10 20 at 10.22.37 AM

Pacific Crest

Not good! And here's a chart of AMC's new shows:

Screen Shot 2016 10 20 at 10.22.51 AM

Pacific Crest

Pacific Crest's thesis is that there are simply too many good serialized dramas being produced, especially by streaming services, and AMC is suffering from the glut. Pacific Crest had been hopeful that AMC's strength of programming would continue to help it prosper, but now the analysts are significantly lowering their ad revenue estimates going forward, and think "continued declines for existing AMC programming are likely."

Advertisement

There was one bright spot according to Pacific Crest, however.

"Despite very weak trends in original performance overall in 2016, we expect the premiere of The Walking Dead Season 7 this Sunday night (Oct. 23) to perform relatively well. The show demonstrated evidence of stability in average audience through the second half of Season 6, and a notable cliffhanger around who Negan killed should fuel viewership for the new season."

But that is cold comfort for a business they believe will continue to bleed.

NOW WATCH: The 7 best TV shows on Netflix you've probably never heard of